How to protect your dreamRight. That’s it. You’ve thought about it for long enough. You’ve been over and over it in your mind. Your friends and family are bored of hearing about your Big Idea. Now it’s time to do it. You’re going to set up your own business.

Congratulations! You’re an entrepreneur. You’ve written a business plan setting out what your company will do, how much it will make and how much it will spend. But wait. Have you thought through all the potential risks that could prevent you from hitting your targets? Your financial forecasts could be ruined if an unhappy client sues you or your office is damaged by a burst water pipe, for example.

Even if you’re running your start-up on a very tight budget you shouldn’t think that small business insurance is a luxury you can do without. Business insurance helps protect the hard work you have put in to establish your business – after all, getting your business off the ground is no easy feat.

Don’t assume that your household insurance policy will cover your business if it’s based at home. For example if the basement of your house (which doubles as your business premises) is flooded your home insurer won’t necessarily reimburse you for your water-damaged merchandise or computer equipment, and certainly won’t pay for any loss of income, as it’s a home policy and not a business one.

It’s also a myth to think that just because your business is small it doesn’t face large risks. A small marketing agency or software designer accused of copyright infringement could face a compensation claim that is much bigger than its annual revenue. Defending your business against a lawsuit is stressful, time consuming and expensive and it’s something no small business would want to do alone.

Do some research, but when shopping for insurance it’s important to find out about each company’s financial strength and track record. Read their customer satisfaction reviews, because it isn’t just about paying a claim, it’s about getting your business back up and running as quickly as possible after a crisis. After all, your livelihood depends on it.

Starting your own business requires a lot of hard work and determination. Success is never guaranteed, but you should be sure of one thing: if you have an insurable risk then an insurer is best placed to help you manage those risks. With the right cover, you can focus on what is most important – developing your business.